Can publishers successfully pivot to user revenues first?
This is the second of 5 from our series Introducing The Newscene, leading up to our official beta launch on Friday 3rd of May. We will be releasing a new part every weekday, so watch this space & follow us.
By going online and try to finance their mission with advertising, publishers were entering a commodity business that would be dominated by software and scale. Their sole weapon was words.
A brief history of journalism and profitability
Journalism was never meant to be a profitable business
For hundreds of years, publishers weren’t really selling content. They sold a medium. Publishing has been organized as if the medium was what they were selling. The words were almost irrelevant and when it did, it was because it would eventually help to sell more papers.
“If the content was what they were selling, why has the price always depended mostly on the format? Why didn’t better content cost more?”
Paul Graham
The first issue the industry faced was when people needed less paper. The whole routine surrounding print creation and business suddenly became less relevant and less profitable. Then some tried to replicate online what used to work on paper. Giving content for free and make money from advertising, CPM, etc. But then they had to face much stronger players with deeper pockets. They failed.
We can all agree: traffic-based revenue is a failure
It was probably the smartest idea at the time. With no printing costs and the ability to reach a much larger audience, publishing could be supported by advertising alone. If so, it would be a huge win/win: Free information for the world and strong businesses with global reach. And we can’t deny the fact that an ad-supported model did support multiple generations of “objective” journalists.
But ad-supported journalism led to crappy content and lots of noise. For a couple of years now, people have been writing and optimizing their content for whatever will travel best on Facebook or attract the most attention. The model is showing its limits as we can see with Vice, Buzzfeed, Vox, MIC, and more laying off tons of people, being sold at huge discounts, or simply going out of business.
“The reason quality — of content and experience — has gone down in publishing, not up, despite the power of competition and technology, is because publishers are competing for advertiser dollars, not audience dollars.”
Ev Williams
Is tackling reader revenues an impossible mission?
No! Enough publishers have succeeded when making this bet to avoid being called lucky. They are named Monocle, Business of Fashion, De Correspondent, Mediapart, Le Canard enchaîné, The Gentlewoman, Zetland, NZZ (I’m deliberately not including big names!). And they have the following characteristics in common:
Editorial rigor
Subject narrowness
Finest UX and/or strong identity
Reader revenues as a priority
Their media as a platform, a community, not just words sent down to readers.
Reader revenues can be seen as the mother of every other sustainable revenue source!
Beyond the fact that recurring revenues give solid ground to your business; Once you prove that you know how to sell your content; Once you know how to frame the narrative of a subject, a vertical; Once you become an authority, a trusted voice as a competitive advantage.
You can build your own native advertising business; You can partner with / for the audience you deeply know; You can build content marketing income streams; You can start writing and directing movies & documentaries for, let’s say, Netflix; You can build a BtoB business if your subject/market is suited for it; You can write reports and provide data at a high price
You name it…
Bottom line
So can publishers successfully pivot to user revenues first? Yes! But once again it requires a serious leap in how they approach their mission and business model.
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